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Edison Investment Research Limited
ABC arbitrage (ABCA): Initiation - A specialist arbitrage trader and asset manager
01-Aug-2023 / 07:15 GMT/BST
The issuer is solely responsible for the content of this announcement.

London, UK, 01 August 2023

ABC arbitrage (ABCA): Initiation - A specialist arbitrage trader and asset manager
ABC arbitrage group has been successfully developing and executing non-directional trading strategies since 1995, which
has allowed the group to deliver a strong ROE of 22% over the last 15 years (with an ROE above 10% in each of these
years). Historically, ABCA has paid almost all its profits as dividends. As the group has opened some of its strategies
to external investors, it also offers the prospects of growing fee income from third-party capital (6.5% of total
revenue in 2022).

In our base scenario, assuming growth in third-party AUM to c EUR434m and EUR617m by FY25e and FY27e, respectively, and
ABCA's long-term return on equity of c 16% pa, we arrive at a fair value per ABCA share of EUR6.84 (c 15% above the
current share price). Our bear case scenario assumes no additional inflow of third-party capital and suggests a fair
value per share of EUR5.76 (3% downside), whereas in our bull case scenario we assume ABCA reaches its target third-party
AUM of EUR800m by 2025, which renders a fair value of EUR8.32 per share (40% upside).
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1691973 01-Aug-2023

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END) Dow Jones Newswires

August 01, 2023 02:15 ET (06:15 GMT)